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I'm open to the idea of breaking them up and separating the paid and organic sides more fully (and with much more outside accountability, but the auction model
by handedness 7y ago
I'm open to the idea of breaking them up and separating the paid and organic sides more fully (and with much more outside accountability, but the auction model isn't terribly instructive.
Auction houses virtually always charge fees, typically as a percent of the close price, with some allocated against the buyer, some against the seller (on the order of ~5-15% on each side).
They also have listing fees for sellers and bidder registration fees for buyers, so if no lots change hands they still cover their expenses.
The requisite hotel rooms for the auction staff are typically comped by the hotel attached to the venue, and venues are often comped as they attract bidder bookings during otherwise slow periods.
Auction houses don't pay themselves to list their own items or merchandize their own services.
It's almost pure upside the auction house. Their big risk is nobody will register to bid and/or buy and next year's auction is dead in the water.
In Google's case, the advertiser is covering both fees, and the user is "paying" (if you will) in terms of giving up their personal data in exchange for search results (more or less) so Google can charge their pool of advertisers more (in aggregate).